marketing ch.2
What is a strategic business unit (SBU)?
An SBU can be a company division, a product line within a division, or sometimes a single product or brand.
A company can ________ an SBU by selling it or phasing it out and using the resources elsewhere. A) divest B) promote C) expand D) harvest E) hold
a
A company's broad mission leads it to develop all of the following EXCEPT ________. A) budget objectives B) business objectives C) sales objectives D) marketing objectives E) customer engagement objectives
a
According to the Boston Consulting Group approach, ________ serves as a measure of company strength in the market. A) relative market share B) product development C) market diversification D) product attribute E) market segmentation
a
By harvesting its SBU, a company would most likely be ________. A) milking the SBU's short-term cash flow regardless of the long-term effect B) selling the SBU or phasing it out and using the resources elsewhere C) investing just enough to hold the SBU's current market share D) investing more in the business unit to build its share E) diversifying the company's product line
a
Cleats, Unlimited developed a new style of soccer shoe. This is an example of ________. A) product development B) market development C) market penetration D) diversification E) product differentiation
a
Each company must divide up the total market, choose the best segments, and design strategies for profitably serving chosen segments. This process involves market segmentation, ________, differentiation, and positioning. A) market targeting B) marketing implementation C) supply-chain analysis D) price discrimination E) market diversification
a
Fun-Spot Fun Park represents a high-growth, high-share business. According to the BCG matrix, it can be classified as a ________. A) star B) question mark C) bear D) cat E) dog
a
Harris Brown, the marketing manager at a small retail chain, wants to assess his firm's strengths, opportunities, weaknesses, and threats. Which of the following would be best suited for his purpose? A) SWOT analysis B) cluster analysis C) portfolio analysis D) regression analysis E) Porter's five forces analysis
a
In the marketing mix, design, packaging, services, and variety can be categorized under ________. A) product B) price C) promotion D) place E) position
a
In the marketing mix, place includes ________. A) logistics B) discounts C) sales promotion D) advertising E) packaging
a
Mission statements should be ________. A) meaningful and specific yet motivating B) technology oriented C) written solely for public relations purposes D) focused on increasing sales or profits E) strictly product oriented
a
Ravenshaw Corp. assigns its sales and marketing people to specific countries, regions, and districts. Ravenshaw Corp. is most likely an example of a ________. A) geographic organization B) product organization C) functional organization D) niche marketer E) mass marketer
a
RedFin manufactures diving equipment that is highly regarded by customers worldwide. Each department in RedFin contributes to its success and can be thought of as a(n) ________. A) link in the company's internal value chain B) separate organization C) independent subsidiary of the company D) separate market segment E) SBU
a
Ron and Gail plan to lower Fun-Spot's prices in an effort to encourage customers to stay longer, visit more often, and spend more money during each visit. What type of strategy are Ron and Gail planning? A) market penetration B) market development C) product development D) product adaptation E) diversification
a
The managers of Alfredo's Pizza, a popular pizzeria in New York City, have been increasingly encouraging senior citizens to visit the pizzeria's numerous outlets spread across the city. Anticipating a rise in the population of senior citizens in the area, the management of Alfredo's Pizza is seeking to tap into this promising segment that consists of retired, affluent consumers. In this instance, the managers of Alfredo's Pizza are anticipating company growth through ________. A) market development B) product development C) mass customization D) niche marketing E) product differentiation
a
Which of the following is a major advantage of the market organization? A) The company is organized around the needs of specific customer segments. B) The company exploits bleeding-edge technologies to keep ahead in the market. C) The company has a flat organizational structure. D) The company allows its salespeople to settle into a specific territory. E) The company caters to a single, small market segment.
a
Which of the following is an element of the marketing mix? A) place B) education C) needs D) wants E) esteem
a
________ provides a complete analysis of the company's situation. A) A SWOT analysis B) A marketing audit C) Regression analysis D) Return on marketing investment E) Marketing budget evaluation
a
________ refers to measuring and evaluating the results of marketing strategies and plans and taking corrective action to ensure that the objectives are achieved. A) Marketing control B) Marketing implementation C) Satisficing D) Prospecting E) Benchmarking
a
A ________ documents an organization's purpose—what it wants to accomplish in the larger environment. A) vision statement B) mission statement C) business portfolio D) value proposition E) product strategy
b
Alpha Motors offers "Green automobiles for a greener world." This refers to the ________ of Alpha automobiles. A) brand resonance B) position C) brand equity D) pleasure value E) added value
b
During portfolio analysis, a company ________ after identifying the key businesses that make up the company. A) formulates a short-term marketing plan B) assesses the attractiveness of its various SBUs C) assesses its strengths and weaknesses D) performs a SWOT analysis E) assesses the effectiveness of its various channel intermediaries
b
FencePro, a local company, has developed an entirely new mounting system for chain link fences. After acquiring a distributor, FencePro now has the ability to market its products nationwide. FencePro is most likely following a ________ strategy. A) market penetration B) market development C) downsizing D) product adaptation E) product development
b
In the context of a company's marketing mix, ________ includes company activities that make the product available to target consumers. A) position B) place C) price D) promotion E) branding
b
Lark Inc., an American electronics company, is currently reviewing new geographical markets to sell its highly popular televisions. By 2020, it plans to open new stores across all the major South Asian cities. Lark is most likely following a ________ strategy. A) local marketing B) market development C) diversification D) product adaptation E) product development
b
Making more sales to current customers without changing a firm's products is known as ________. A) market segmentation B) market penetration C) product diversification D) product development E) prospecting
b
Market segmentation can be best described as the process of ________. A) assigning specific human attributes to a given brand B) dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate marketing programs C) evaluating each market segment's attractiveness and selecting one or more segments to enter D) turning marketing plans into marketing actions to accomplish strategic marketing objectives E) maintaining a strategic fit between organizational goals and changing marketing opportunities
b
Marketing ________ addresses the what and why of marketing activities, while marketing ________ addresses the who, where, when, and how. A) analysis; planning B) planning; implementation C) implementation; planning D) organization; implementation E) control; planning
b
Marketing plays a key role in the company's strategic planning in all of these ways EXCEPT ________. A) providing input to identify attractive market opportunities B) designing new products from scratch C) creating customer value and building profitable relationships with customer groups D) designing strategies for reaching a unit's objective E) providing a guiding philosophy
b
Mission statements should be defined in terms of ________. A) the advantages a company's products provide B) satisfying basic customer needs C) the value a company's products provide D) the profitability of a company's products E) the variety they offer to a customer
b
Modern strategic planning ________. A) exclusively consists of a company's short-term goals B) is decentralized C) does not involve cross-functional teams D) does not take the overall mission of the company into consideration E) is highly centralized
b
Paul Robinson has identified a group of potential customers who seem to respond in a similar way to a series of magazine and radio advertisements for his company's product. Paul has identified a ________. A) target market B) market segment C) niche market D) product attribute E) product design
b
Rob has been asked by his manager to identify a group of potential customers who would respond in a similar way to a given set of marketing efforts. In this instance, Rob has been asked to identify a ________. A) new product B) market segment C) marketing intermediary D) brand E) product line
b
The BCG matrix approach is problematic in that it ________. A) focuses on planning for the future at the cost of ignoring the present B) focuses solely on current businesses and provides little scope for future planning C) tends to undermine the importance of market growth rate as a measure of market attractiveness D) tends to undermine the importance of relative market share as a measure of company strength in the market E) fails to classify SBUs
b
The best business portfolio is the one that ________. A) provides the greatest opportunity for increasing profits B) best fits the company's strengths and weaknesses to opportunities in the environment C) ensures that the company will realize increased share of market D) allows the company to decrease its overall costs E) entices customers to purchase even more products from the company
b
The purpose of ________ is to ensure that the company achieves the sales, profits, and other goals set out in its annual marketing plan. A) benchmarking B) operating control C) strategic control D) SWOT analysis E) a marketing audit
b
Which of the following is NOT a market-oriented business definition? A) "We empower customers to realize their dreams." B) "We make high-quality consumer food products." C) "We sell success and status." D) "We create the Hilton experience." E) "We bring innovation to every home."
b
Which of the following is NOT an element of the marketing mix? A) place B) purchase C) product D) price E) promotion
b
Which of the following is the first step of business portfolio planning? A) shaping the future portfolio by developing strategies for growth and downsizing B) determining which businesses should receive more, less, or no investment C) identifying internal strengths and weaknesses D) identifying future opportunities E) determining short-term goals
b
Which of the following is true with regard to a market segment? A) A market segment consists of consumers with dissimilar needs and preferences. B) A market segment consists of consumers who respond in a similar way to a given set of marketing efforts. C) Very few markets have segments. D) Dividing the market into segments decreases the efficiency of the selling process. E) Dividing the market into segments reduces composite demand.
b
Which of the following is true with regard to cash cows? A) They are high-growth, high-share businesses or products. B) They can be used to help finance the company's question marks and stars. C) They require significant cash to maintain market share. D) They are low-share businesses and products. E) They do not promise to be large sources of cash.
b
Which of the following is true with regard to the product/expansion grid? A) It classifies SBUs into four distinct categories. B) It is a useful device for identifying growth opportunities. C) It helps companies analyze their internal strengths and weaknesses. D) It functions on the premise that firms should downsize to regain market share. E) It is a useful device for segregating customers into distinct categories.
b
Which of the following refers to the process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors? A) market diversification B) market segmentation C) downsizing D) customer relationship management E) prospecting
b
Which of the following would be classified as an opportunity in a SWOT analysis of Fun- Spot? A) A rival amusement park announces plans to open three new rides next season. B) A new luxury hotel is being constructed in the area, with the aim of attracting more high- spending families on vacation. C) Ron and Gail have paid off the mortgage on Fun-Spot, significantly reducing their monthly expenses. D) Fun-Spot employees tend to be enthusiastic and young, projecting an image of fun and vitality. E) Fun-Spot plans to further diversify its offerings by beginning a two-week summer camp for elementary school students.
b
________ are low-growth, high-share businesses/products that need less investment to hold their market share. A) Stars B) Cash cows C) Question marks D) Dogs E) Bears
b
________ refers to activities that communicate the merits of the product and persuade target customers to buy it. A) Position B) Promotion C) Pricing D) Segmentation E) Prospecting
b
Amor, a successful brand of women's clothing, recently introduced a line of fitness equipment. This is an example of ________. A) mass customization B) niche marketing C) diversification D) prospecting E) product adaptation
c
Arrow is "a different kind of company, manufacturing a different kind of a car"; the RoadPro is "like nothing else." Statements such as these reflect a firm's ________. A) portfolio B) marketing segment C) positioning D) marketing mix E) mission statement
c
Companies may want to downsize their business portfolios for all but which of the following reasons? A) The firm may have grown too fast. B) The firm may have entered areas where it lacks experience. C) The customers may have purchased all they need. D) The market environment might change. E) The products might simply age.
c
Customers can be grouped and served in various ways based on several factors. These include all of the following EXCEPT ________ factors. A) psychographic B) behavioral C) technological D) demographic E) geographic
c
Effective positioning begins with ________. A) pricing B) diversification C) differentiation D) promotion E) segmentation
c
Elmo Corp., a manufacturer of personal computers and printers, recently established an office furniture exporting business. This is an example of ________. A) niche marketing B) local marketing C) diversification D) product adaptation E) downsizing
c
Emerson Studios has designed its marketing organization along the lines of a ________ organization in which operational specialists head different marketing activities. A) geographic B) product C) functional D) customer E) market
c
Fun-Spot's mission is ________. A) product oriented B) technology oriented C) market oriented D) design oriented E) narrowly focused on profits
c
More and more, companies are shifting their brand management focus from brand profitability toward ________. A) technology management B) product management C) customer management D) functional management E) geographic management
c
Most standard portfolio analysis methods evaluate SBUs on the ________. A) potential for niche or global marketing B) degree of product differentiation C) strength of the market or industry position D) accessibility to rural markets E) number of successful business acquisitions
c
Ron and Gail, owners of Fun-Spot, strive to provide new offerings and entertainment options for their visitors. This type of strategy can be best described as ________. A) market penetration B) market development C) product development D) niche marketing E) diversification
c
Teenagers are expected to respond in a similar way to a set of marketing efforts. In other words, this group represents a ________. A) channel intermediary B) line extension C) market segment D) product attribute E) brand personality
c
The main section of the marketing plan most likely presents a detailed ________ analysis of the current marketing situation. A) breakeven B) SBU C) SWOT D) regression E) cluster
c
The major activity in strategic planning is ________, whereby management evaluates the products and businesses that make up the company. A) SWOT analysis B) benchmarking C) business portfolio analysis D) breakeven analysis E) prospecting
c
The most common form of marketing organization is the ________ organization. Under this organization, an operational specialist heads different marketing activities. A) geographic B) product management C) functional D) customer management E) market
c
The process of evaluating each market segment's attractiveness and selecting one or more segments to enter is known as ________. A) market segmentation B) diversification C) market targeting D) prospecting E) downsizing
c
Which of the following Ps in the marketing mix describes the goods-and-services combination the company offers to the target market? A) price B) promotion C) product D) place E) package
c
Which of the following best describes a strategic business unit? A) the internal value chain of a company B) the supply chain of a company C) the key businesses that make up a company D) the key channel intermediaries of a service company E) the key competitors of a company
c
Which of the following functions is NOT part of managing the marketing process? A) planning B) control C) budgeting D) implementation E) organization
c
Which of the following is NOT part of a company's decision about which customers it will serve and how? A) differentiation B) targeting C) budgeting D) segmentation E) positioning
c
Which of the following is a portfolio-planning tool for identifying company growth opportunities through market penetration, market development, product development, or diversification? A) BCG matrix B) analysis of variance C) product/market expansion grid D) Harris matrix E) SWOT analysis
c
Which of the following is the first step in strategic planning? A) setting short-term goals B) developing the business portfolio C) defining the organizational mission D) formulating the key marketing strategies E) identifying the organization's weaknesses and the threats it faces
c
Which of the following is true with regard to a SWOT analysis? A) It classifies SBUs into four distinct categories. B) It measures customer response to a new product. C) It evaluates the company's overall strengths. D) It evaluates the growth potential of a market segment. E) It ignores the threats faced by a company while assessing its situation in the market.
c
Which of the following is true with regard to strategic planning? A) At the corporate level, the company starts the strategic planning process by determining what portfolio of businesses and products is best for the company. B) A strategic plan deals with a company's short-term goals. C) The focus of strategic planning is to define a game plan for long-run survival and growth. D) The strategic plan is a statement of an organization's purpose. E) Strategic planning involves identifying segments of consumers with identical preferences.
c
________ are a type of SBU that often require heavy investments to finance their rapid growth. A) Cash cows B) Question marks C) Stars D) Dogs E) Bears
c
________ are low-share business units in high-growth markets that require a lot of cash to hold their share. A) Stars B) Dogs C) Question marks D) Cash cows E) Bears
c
________ involves looking at whether a company's key action plans are well-matched to its opportunities. A) Operating control B) Benchmarking C) Strategic control D) Regression analysis E) Portfolio analysis
c
A company's broad mission leads to ________. A) increasing profits and more customers B) increasing sales and decreasing costs C) a higher share price D) a hierarchy of objectives, including business objective and marketing objectives E) increased market share and increasing profitability
d
A marketing plan begins with a(n) ________, which presents a brief summary of the main goals and recommendations of the plan for management review. A) budget B) opportunity analysis C) threat analysis D) executive summary E) action program
d
A women's apparel manufacturer in California recently acquired a Houston-based company that manufactures office furniture. This is an example of ________. A) product development B) market development C) market penetration D) diversification E) product differentiation
d
According to the Boston Consulting Group approach, ________ provides a measure of market attractiveness. A) product attribute B) product design C) market penetration D) market growth rate E) market segmentation
d
All of the following steps pertain to the marketing control process EXCEPT ________. A) setting goals B) measuring performance C) taking corrective action D) defining the company's mission E) evaluating the causes of gaps between expected and actual performance
d
Berman Electronics, a chain of appliance stores in North America, caters to a wide range of customers. It has a marketing organization in which different operational specialists head different marketing activities. Berman Electronics is a(n) ________. A) customer management organization B) niche marketer C) early adopter D) functional organization E) laggard
d
Companies that define their missions in terms of products or technologies are considered myopic primarily because ________. A) products and technologies result in low returns on investment B) consumer preferences with regard to products and technology are difficult to predict C) consumer preferences for different product categories vary from time to time D) products and technologies eventually become outdated E) most consumers are not comfortable using sophisticated technology during the buying process
d
Crocus, a gift store, specializes in serving customer segments that major competitors overlook and ignore. Which of the following best describes Crocus? A) market follower B) market challenger C) early adopter D) market nicher E) laggard
d
Each department in a company that carries out value-creating activities can be thought of as a link in the company's ________. A) channel of intermediaries B) external value stream C) demand chain D) internal value chain E) supplier chain
d
In a SWOT analysis, ________ include favorable trends in the external environment. A) strengths B) challenges C) weaknesses D) opportunities E) threats
d
Many managers think that "doing things right," or ________, is as important as, or even more important than, "doing the right things." A) strategy B) planning C) positioning D) implementation E) targeting
d
Marketing control involves four steps including all the following EXCEPT ________. A) setting specific marketing goals B) measuring the marketing plan's performance in the marketplace C) evaluating the causes of any differences between expected and actual performance D) increasing the staffing in the planning department E) taking corrective action to close the gaps between goals and performance
d
Mission statements should ________ and be defined in terms of ________. A) be technology oriented; meeting the self-actualization needs of customers B) be product oriented; satisfying the esteem needs of customers C) embody the company's short-term plans; current opportunities D) be market oriented; satisfying basic customer needs E) address sales and profits; the net return on investments
d
Omega Inc. makes lightweight sunglasses with 100-percent UV protection for people who love to hunt, hike, and ride bikes. The company's long-term plans include the development of lenses that, in addition to protecting users from UV rays, would help reduce lens spotting through effective water-sheeting methods. This new feature would be valuable to people who fish. Given the rising popularity of recreational fishing in the United States, Omega products clearly have a huge market potential. In terms of a SWOT analysis, Omega has recognized a market ________. A) weakness B) strength C) threat D) opportunity E) challenge
d
Phoenix, a popular coffee shop chain in North America, recently opened 400 stores to cater to its rapidly increasing number of patrons. This exemplifies ________. A) product differentiation B) product development C) diversification D) market penetration E) market segmentation
d
Sunny Brews is a coffeehouse chain based in Boston. It recently introduced Eva, a mild roast, which became immensely popular. This exemplifies ________. A) benchmarking B) diversification C) mass customization D) product development E) downsizing
d
The collection of businesses and products that make up a company is called its ________. A) strategic business unit B) supply chain C) strategic plan D) business portfolio E) internal value chain
d
The managers of Arrow, an American retail chain, are currently reviewing new demographic markets to sell the firm's current products. This is an example of ________. A) market penetration B) product development C) mass marketing D) market development E) product adaptation
d
The marketing logic by which a company hopes to create customer value and achieve profitable customer relationships is referred to as the ________. A) price B) marketing implementation C) value chain D) marketing strategy E) downsizing
d
The network made up of the company, its suppliers, its distributors, and, ultimately, its customers who partner with each other to improve the performance of the entire system is known as the ________. A) business portfolio B) supply chain C) marketing mix D) value delivery network E) internal value chain
d
Which of the following is NOT something a company must determine when analyzing its current business portfolio? A) which businesses should receive more investment B) which businesses should receive less investment C) which businesses should receive no investment D) which businesses should be sold or closed E) which businesses shape the future portfolio
d
Within a company, who is most likely to perform strategic planning? A) the president and vice presidents B) the accounting and finance departments C) the marketing and sales departments D) cross-functional teams of divisional managers close to their markets E) the manufacturing and production departments
d
________ analysis is an overall evaluation of the company's strengths, weaknesses, opportunities, and threats. A) Porter's five forces B) A breakeven C) A regression D) A SWOT E) A cluster
d
________ measures the profits generated by investments in marketing activities. A) A SWOT analysis B) A marketing audit C) Regression analysis D) Return on marketing investment E) Marketing budget evaluation
d
________ refer(s) to meaningful sets of marketing performance measures in a single display used to monitor strategic marketing performance. A) Field automation systems B) Market segments C) Market share D) Marketing dashboards E) Line extensions
d
In a SWOT analysis, which of the following would be considered a strength? A) industry trends B) technological shifts C) environmental demands D) performance challenges E) internal capabilities
e
The process of arranging for a product to occupy a clear, distinctive, and desirable place relative to competing products in the minds of target consumers is known as ________. A) market segmentation B) differentiation C) target marketing D) market targeting E) positioning
e
Which of the following is NOT a step in the strategic planning process? A) defining the company mission B) setting company objectives and goals C) designing the business portfolio D) planning marketing and other functional strategies E) evaluating members of the company's value chain
e
Which of the following is true with regard to geographic organization? A) It is the most common form of marketing organization. B) Different marketing activities are headed by a functional specialist. C) It requires salespeople to have international experience. D) It reduces the overall efficiency of salespeople. E) It allows salespeople to work with a minimum of travel time and cost.
e
A company's mission statement provides the depth needed for all segments of the company to reach their goals.
false
An American airline company started a grocery chain in Australia. This is an example of product development.
false
Benchmarking refers to the process that turns marketing plans into marketing actions to accomplish strategic marketing objectives.
false
Company growth through diversification involves offering modified or new products to the company's current markets.
false
Market penetration involves offering modified or new products to current markets.
false
On the BCG matrix, "question marks" are high-growth, high-share businesses or products.
false
Since companies want to work together to attract customers, marketers do not need to practice partner relationship management.
false
The major activity in strategic planning is product innovation.
false
A clear mission statement acts as an "invisible hand" that guides people in the organization.
true
Customer engagement and value are the key ingredients in the marketer's formula for success.
true
Each department in a company can be thought of as a link in the company's internal value chain.
true
Market development involves company growth by identifying and developing new market segments for current company products.
true
Mission statements should be market oriented.
true
Operating control involves checking ongoing performance against the annual plan and taking corrective action when necessary.
true
Return on marketing investment refers to the net return from a marketing investment divided by the costs of the marketing investment.
true
The four marketing management functions are analysis, planning, implementation, and control.
true
The major activity in strategic planning is business portfolio analysis, whereby management evaluates the products and businesses that make up the company.
true
The purpose of strategic planning is to find ways in which your company can best use its strengths to take advantage of attractive opportunities in the environment.
true
